This technical note provides background information about the source data and
estimating methods used to produce the estimates presented in the GDP news release.
The complete set of estimates for the fourth quarter is available on BEA's Web site at
www.bea.gov; a brief summary of "highlights" is also posted on the Web site. In a few
weeks, the estimates will be published in BEA's monthly journal, the Survey of Current
Business, along with a more detailed analysis of the estimates ("GDP and the
Economy").
Sources of Revision to Real GDP
Real GDP increased 0.4 percent (annual rate) in the fourth quarter, which was 0.3
percentage point more than in last month’s estimate. The revision to GDP reflected
upward revisions to nonresidential fixed investment and to exports that were partly offset
by a downward revision to consumer spending:
* The upward revision to nonresidential fixed investment was primarily accounted
for by an upward revision to structures, which was based on revised Census
Bureau construction spending data for November and December.
* The upward revision to exports reflected upward revisions to both services and
goods. The revisions were based on BEA’s international transactions accounts
and reflected data on foreign military sales and transfers under U.S. military
sales contracts from the Department of Defense.
* The downward revision to personal consumption expenditures was primarily to
services, reflecting downward revisions to spending by nonprofit institutions and
to spending by households for recreation services. The revisions were based on
newly available data from the Census quarterly services survey for the fourth
quarter.
The price index for gross domestic purchases—the prices paid by U.S. residents for
goods and services wherever produced—increased 1.6 percent in the fourth quarter, 0.1
percentage point more than in last month’s estimate.
Gross Domestic Income and Corporate Profits
Real gross domestic income (GDI), which measures the output of the economy as the
costs incurred and the incomes earned in the production of GDP, increased 2.6 percent
in the fourth quarter, following an increase of 1.6 percent in the third quarter. For a given
quarter, the estimates of GDP and GDI differ due to the incorporation of largely
independent source data. Over longer time spans, however, the estimates of GDP and
GDI tend to follow similar patterns; over the last four quarters, real GDP increased 1.7
percent, and real GDI increased 1.8 percent.
Profits from current production increased $45.4 billion, or 2.3 percent (quarterly rate), in
the fourth quarter. Domestic profits of financial corporations decreased $3.5 billion,
domestic profits of nonfinancial corporations increased $24.8 billion, and rest-of-the-
world profits increased $24.1 billion.
Brent R. Moulton
Associate Director for National Economic Accounts
Bureau of Economic Analysis
(202) 606-9606